UNITED NATIONS, N.Y.
— When Iraq invaded Kuwait in 1990, the world community went to war.

But when Indonesia invaded East Timor in 1975, the world used a different tactic - the shame of condemnation - that may now be paying off.

Beset with internal woes, the giant Southeast Asian nation is talking with the United Nations about possibly letting the tiny, Roman Catholic half-island go free. Officials in Jakarta say keeping the troubled province is not worth the foreign pressure - which sometimes came in the denial of aid, arms, and respect.

With its troubled politics and economy, "Indonesia is in a very difficult period. The decision has been made to get rid of whatever problems they can," says Daniel Lev, professor emeritus of political science at the University of Washington in Seattle. "The most obvious one is East Timor, from which Indonesia gets no great benefit and a great deal of anxiety."

A round of UN-sponsored talks between Indonesia and Portugal that ended Feb. 8 made more incremental progress toward determining the outcome for Indonesia's 27th province, a claim the UN has never recognized. The UN considers Portugal the administering power.

Who wants what

But the East Timorese themselves can be excused for appearing frustrated and disillusioned at the same time. Though Indonesian Foreign Minister Ali Alatas said his country could rescind its 1976 annexation of the former Portuguese colony if the East Timorese reject an autonomy plan, he stood impervious to calls for a referendum, fearing that such a vote would establish a precedent for separatists around the archipelago with its mostly Muslim population.

Mr. Alatas insists that some other means should be employed to ascertain people's opinion. "A referendum is not the way to proceed because of the inherent risks and dangers," he says. "What we have asked from the UN ... is to find a way short of a referendum to consult the views of the East Timorese in the most effective way. We don't know exactly what the form will be."

UN mediator Jamsheed Marker and Portuguese Foreign Minister Jaime Gama have been consulting with a number of East Timorese. Alatas suggests that the contacts can be broadened as a substitute for a referendum, a suggestion unpalatable to Lisbon. "I cannot see the UN having another methodology for ascertaining the view of any people except the way of democracy and the way of voting process," Mr. Gama said.

This issue promises to be a major sticking point in the trio's next meeting on March 10. East Timorese independence leader Jose Ramos-Horta, co-winner of the 1996 Nobel Peace Prize, insists that a referendum would favor independence.

Autonomy would be accepted only as a transition to independence, Mr. Ramos-Horta coveyed to UN Secretary-General Kofi Annan, who has been actively involved in the talks. And this, Ramos-Horta added, must be preceeded by a drastic reduction of Indonesian troops, a demobilization of paramilitary groups, a gun collection program and UN observers on the ground, and identifying eligible voters.

Alatas, however, said that if the UN determines that East Timor rejects the autonomy plan currently being drafted, he would recommend in August to a newly elected legislature "to part ways with East Timor." An autonomy leading to independence would not be considered by Jakarta.

"Why should we, Indonesia, be asked to apply wide- ranging autonomy as a special treatment to East Timor, while the other provinces will just look on?" said Alatas. We would "continue to bear the burden of its financing, continue to bear the burden of all kinds of accusations if anything goes wrong? And then at the end of the period, have the people tell us, 'thank you very much, we are now ready for independence.' "

Many community leaders in the East Timor capital of Dili now recognize that, after the long occupation, it will take years for East Timor to develop its economy enough to support itself as an independent country.

"We don't want to proclaim independence tomorrow and immediately after ask other people for money and for help," says Leandro Isaac, director of the East Timor Reconciliation committee. Even leaders who have struggled for decades for independence are now calling for a "transition" period overseen by the UN.

"The Indonesian army are now distributing weapons in East Timor, and these weapons are going to people who prefer integration with Indonesia. What that does basically is to set up a civil war," says Mr. Lev. "A transitional period to prevent that is very important."

A military's economy

In Dili, nearly every business in the underdeveloped territory of 830,000 people depends on the occupying military for subsistence.

Indonesia has spent money here - the military has built roads and a hospital. But most of the infrastructure supports the troops and has little bearing on the lives of people.

A once-thriving agriculture, for instance, that exported thousands of tons of coffee annually, has been used by the Indonesian military to serve its own needs. Farmers grow rice for the soldiers on East Timor, and a portion of the harvest is shipped off to other islands in the archipelago.

Veteran independence leaders, such as Ramos-Horta, foresee a jobs-creating tourism industry that would be lost if the Indonesian administration left with the military.

"Jakarta is trying to put the onus on the international community," says an official with a Western aid organization active in East Timor, "but they can't expect us to pay for all of the transition to independence."

And other indications of the difficulties facing East Timorese as they confront the prospect of independence are everywhere.

Pro-Indonesian groups are terrorizing supporters of indendence, according to Manuel Carrascallao, a community leader. "If the military hadn't given out any weapons, we wouldn't have had any violence," he says, referring to the reports of dozens of killings and acts of intimidation.

In other parts of the territory, villagers identifying themselves as pro-independent proudly flaunt crude spear-throwers that use hundreds of rubber bands to propel metal spear heads from long wooden staffs.

"They can really fly - as far as one to two hundred yards," said a Western observer who met with the villagers.

Carrascallao and others suggest that the military has handed out the weapons and encouraged acts of violence as part of a ploy to make the outside world believe that its continuing presence is necessary - to keep the peace. The military contends it has armed the pro-integration groups to provide them with the means of "self-defense" should East Timor become independent.

Talk of a UN observer mission to East Timor has cropped up, but have not grown yet. A UN contingent would be costly. But the UN may not have a choice. A peaceful resolution to the East Timor problem would be a diplomatic coup this year for Mr. Annan, who suffered a lot of criticism this past year for problems with his talks with Iraqi President Saddam Hussein and Libyan leader Qaddafi.

From 1992 to 1996, there have been eight rounds of talks on the foreign-minister level, with Indonesia refusing to consider even autonomy for East Timor. Jakarta put up a tough stance despite international indignation, which mounted after a 1991 massacre of as many as 200 peaceful demonstrators in Dili. Washington suspended some arms sales to Indonesia. Last June, three European Union ambassadors visited Dili, although they had to curtail their trip due to escalating violence. But these had limited impact on talks. In the final analysis, Jakarta's economic and political turmoil may have been East Timor's best ally.